Harvesting Energy from the Sun

Monday, September 1st, 2014

In California, Solar has been cheaper than the electric rates charged by utilities for years, and it’s been getting cheaper every year. Now, you can get twenty years or more of solar power for about $10,000. That’s about 10 cents/kWh. There are also myriad financing options available in the highly competitive home solar industry. Even better, you don’t have to turn your home in a solar plant like the European modern homes shown below. Often times, less is more, especially if your goal is to save the most money while offsetting your impact on the environment.

Solar is probably the best risk-adjusted investment available today. A $10,000 system will produce 5-6000 kWh per year at a value of up to more than 30 cents/kWh, which is $1,500/year, more or less. If rates stayed the same, that would be $30,000 in savings over twenty years, but California’s electricity rates are likely to rise as a result of the State’s investment in Smart Grid. Actual savings would likely be higher. Your solar consultant can provide a much more specific estimate for your home.

Of course, this amounts to a tax-free double-digit rate of return- and it’s good for the environment. Today’s solar contracts take care of most of the maintenance as well; not that there is much to maintain. There are options to lease, own, or strictly buy the kWh produced by the solar equipment through a power purchase agreement. The number of variations on these options is increasing as well. In any case, having solar on your home is a great way to harvest power from the sun.

With solar, most home owners spin their meter backward during part of the day. The utility credits you for the kWh, and you draw electricity back from the grid at the times when the sun isn’t shining. This is called Net Energy Metering (NEM). I previously wrote about time of use rate tariffs, which when combined with NEM create a powerful way to save money, especially if you own an electric vehicle.

The spreadsheet above shows one of PG&E’s time of use rate tariffs, the EV-A rate tariff. You can only use the EV-A rate if you have an electric vehicle. For every kW of solar, about $380 in savings would be generated per year if you lived in an area that has 1,500 sun-hours per year. For the typical 4 kW system, that’s about $1,500 in savings per year. The real advantage of this rate is that for half of the hours in a year, you can get a rate of 10 cents/kWh. That’s about 40% less than PG&E’s base residential rates. The EV-A rate also lowers the fuel cost for your vehicle down to about 3 cents per mile instead of more than 20 cents per mile for the average gas-powered vehicle. That’s $17,000 over 100,000 miles, more or less.

Using power at night when California’s energy supply is cleaner saves money. That’s the essence of the Wind Number, which is the ratio of your power that comes from cheap wind power vs expensive fossil-fuel burning power plants. Solar and an electric vehicle working together increase your Wind Number dramatically. How dramatically? For most people the energy-cost savings are more than $50,000 over a twenty year period.

It’s easy to see that between the solar savings, vehicle savings, and savings generated by the different technologies that I’ve written about before, the cost of dealing with global warming is nothing. In fact, it pays quite well if you live in California.

Copyright (c) Sabreez PBC 2014-2018

Wind Number and Solar Boost are Trademarks of Sabreez PBC
US Patent 9851701, all rights reserved